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2 AI Stocks That Could Be Worth More Than Palantir by 2026
PLTRPalantir Technologies(PLTR) The Motley Fool·2025-03-07 09:15

Core Viewpoint - Palantir Technologies has seen its stock price increase over 1,000% since 2022, resulting in a market cap of 195billion,despiteonlyhaving195 billion, despite only having 2.8 billion in trailing revenue and 462millioninnetincome,indicatingahighvaluationthatmaynotbesustainable[1][2].Group1:PalantirTechnologies−Thestock′svaluationisconsideredexpensive,withanalystsratingitasneutral(hold)duetosignificantdownsiderisks[2].−InvestorsarepayingahighmultipleforPalantir′ssalesandearnings,whichmaynotbejustifiable[2].−OtherAIstocksaretradingatmorereasonablevaluationsandmayoutperformPalantirinthecomingyear[3].Group2:AdvancedMicroDevices(AMD)−AMDisaleadingchipsupplierwithamarketcapof462 million in net income, indicating a high valuation that may not be sustainable [1][2]. Group 1: Palantir Technologies - The stock's valuation is considered expensive, with analysts rating it as neutral (hold) due to significant downside risks [2]. - Investors are paying a high multiple for Palantir's sales and earnings, which may not be justifiable [2]. - Other AI stocks are trading at more reasonable valuations and may outperform Palantir in the coming year [3]. Group 2: Advanced Micro Devices (AMD) - AMD is a leading chip supplier with a market cap of 158 billion and a forward P/E multiple of about 21, with expected earnings growth of 42% annually over the next several years [4]. - Despite a 56% decline from previous highs due to mixed financial results, AMD's data center revenue grew 69% year over year in Q4, reaching 3.9billion[6].−AMD′sGPUsareutilizedbymajortechcompanies,andthecompanyiswell−positionedforgrowthintheAIchipmarket[7].−Theclientsegmentrevenueincreasedby583.9 billion [6]. - AMD's GPUs are utilized by major tech companies, and the company is well-positioned for growth in the AI chip market [7]. - The client segment revenue increased by 58% year over year, reaching a record 2.3 billion in Q4, indicating strong momentum [8]. Group 3: ServiceNow - ServiceNow is an enterprise software company with a market cap of 185billionandaforwardP/Eof56,showingconsistentdouble−digitgrowth[10].−Thecompanyhasexperiencedacompoundannualrevenuegrowthrateof32185 billion and a forward P/E of 56, showing consistent double-digit growth [10]. - The company has experienced a compound annual revenue growth rate of 32% over the last decade, with Q4 subscription revenue growth at 21% year over year [11]. - Management forecasts subscription revenue growth of 18.5% to 19% year over year in Q1 2025, supported by expanding margins [13]. - The addressable market for ServiceNow is expected to grow from 200 billion in 2024 to $275 billion by 2026, driven by increased adoption of AI [14]. - Analysts project ServiceNow to grow earnings at an annualized rate of 32% over the next several years, suggesting it may outperform Palantir in the near term [15].